Exam 1

1. What is real estate?

A. land and buildings

B. a bundle of rights

C. an industry

D. all of the above

2. What is an example of intangible property?

A. automobile

B. lease agreement

C. land

D. iPhone case

3. Can the cost of something be different than the value?

A. yes

B. no

4. Is real property tangible or intangible?

A. tangible

B. intangible

C. both

D. neither

5. What three markets interact in real estate?

A. users, capital, property

B. land, labor, capital

C. capital, financial, money

D. debt, equity, capital

6. If a property income is 100,000 and the capitalization rate is 8 percent, what is the value indication?

A. 80,000

B. 800,000

C. 1,250,000

D. 250,000

7. If a property value is 700,000 and the capitalization rate is 9 percent, what is the income?

A. 63,000

B. 7,777,777

C. 77,000

D. 6,300,000

8. What is the strongest possessory interest estate?

A. leased fee

B. fee simple

C. leasehold

D. tenancy at sufferance

9. Do leaseholds have titles to property?

A. yes

B. no

10.  What is a life estate?

A. ownership until the death of someone

B. a leasehold right

C. tenancy at sufferance

D. all of the above

11. What type of deed is most preferred?

A. quitclaim deed

B. sheriff’s deed

C. warranty deed

D. seller deed

12. An easement is a ________________

A. non-possessory right in real estate.

B. debt

C. loan

D. tenancy at sufferance

13. Can you sell property and retain some of the rights?

A. yes

B. no

14. Do real estate contracts require consideration?

A. yes

B. no

15. What are three powers that government exercises over real estate?

A. habeas corpus, regulation, taxation

B. taxation, taking, regulation

C. taking, taxation, easement

D. regulation, taxation, habeas corpus

16. What is an externality?

A. costs or benefits on a third party

B. leasehold interest
C. condemnation

D. inversion

17. When the Saudi government needs land to build a road, do they have to pay the owner?

A. yes

B. no

18. Is the value of something a fact or an opinion?

A. fact

B. opinion

19. What happens to the capitalization rate as risk increases?

A. increases

B. decreases

C. no change

20. Can real estate have negative value?

A. yes

B. no

Short Answer: 5 questions at 4 points each = 20 points potential

If the property income is 200,000 and the value is 1,800,000, what is the capitalization rate ?

200,000 / 1,800,000 =  0.111 = 11.1%

If the value is 3,000,000 and the capitalization rate is 4 percent, what is the income?

 3,000,000 x .04 = 120,000

If the property income is 250,000 and the value is 1,800,000, what is the capitalization rate ?

 250,000 / 1,800,000 = 0,139 = 13.9%

If the value is 3,000,000 and the capitalization rate is 5 percent, what is the income?

3,000,000 x .05 = 150,000

Name five reasons that the real estate market is different than other markets.

Heterogeneous

Immobile

Localized

Segmented

Private Transactions

 

What is the difference between equity and debt in real estate?

Equity is ownership

Debt is mortgage loans

If the price of crude oil increases, what will happen to the values of real estate in Riyadh and why?

Saudi GDP per capita will increase, raising spending, increasing income on real estate. If Income increases, then value also increases.

If the price of crude oil decreases, what will happen to the values of real estate in Riyadh and why?

Saudi GDP per capita will decrease, reducing spending, reducing income on real estate. If Income decreases, then value also decreases.

 

Exam 1 Review

Ch 3 Questions

1. What is the difference between a warranty deed and a quitclaim deed?

2. Can you sell property and retain some of the rights?

3. What is title insurance?

4. Name five reasons you would have an involuntary deed.

5. What three powers does government exercise?

Ch 2 Questions

1.     What is property?

2.     What is an example of intangible property?

3.     Are cost, price, and value the same thing?

4.     Provide three definitions of real estate.

5.     What is a bundle of rights?

6.     Is real property tangible or intangible?

7.     What three markets interact in real estate?

8.     What is the difference between equity and debt in real estate?

9.     What is IRV?

10.  Name eight things government does in real estate.

11. Name six reasons that the real estate market is different than other markets.

12.  Name three things that property rights allow you to do.

13.  What are subsurface rights?

14. Who owns the subsurface rights in Saudi Arabia?

15. Who owns the subsurface rights in the U.S.?

16. What is the strongest possessory interest estate?

17. What is the weakest possessory interest estate?

18. What is a life estate?

19.  What is a leasehold estate?

20. Do leaseholds have titles to property?

21. What right does a renter have?

22. What right does a landlord have?

23.  Can you hold non-possessory rights in real estate?

24. What is an easement?

25.  Name four types of liens.

Lecture 4 - Government Controls

Lecture 3 - Contracts Deeds and Leases

Lecture 2 - Legal Aspects of Real Estate

Lecture 1 Questions

Please post your answers

1. What are three definitions of real estate?
2. Are cost, price, and value all the thing?
3. What is the difference between a horizontal improvement and a vertical improvement?
4. Do you own property or property rights?
5. Who protects your property rights?
6. What is the relationship between property rights and poverty?
7. What do we mean when we say that real estate is a bundle of rights?
8. What is the relationship between rights and value?
9. Is real property tangible or intangible?
10. What is the difference between tangible and intangible property?
11. Name five careers in the real estate industry.
12. What three markets interact in real estate?
13. What does IRV have to do with real estate?
14. What percent of Saudis own their own home?
15. What is the difference between equity and debt in real estate?
16. Show three equations that describe the relationship between Income, capitalization Rate, and Value.
17. If the value is 1,000,000 and the income is 150,000 what is the capitalization rate?
18. If the capitalization rate is 7 percent and the value is 5,000,000, what is the income?
19. If the income is 500,000 and the capitalization rate is 4 percent, what is the value?
20. What does volatile mean?
21.  If the price of crude oil declines, what will happen to real estate values in Riyadh, and why? (Hint - think about IRV)
22.  If the price of crude oil declines, what will happen to real estate values in Tokyo, and why? (Hint - think about IRV)
23. Supply is ________ and Demand is _____________.
24. What does heterogeneous mean? 
25. What is the most important aspect of real estate?

Lecture 1- The Nature of Real Estate, Government and Rights